Finland now ranks first in global sustainable development goals progress. Barbados is ahead globally in its commitment to UN multilateralism or cooperation among multiple nations. Only 17 percent of sustainable development goals (SDG) targets are on track for 2030, according to the Sustainable Development Report 2025 (SDR) released today by the UN Sustainable Development Solutions Network (SDSN) […]

By Maximilian Malawista
NEW YORK, Jun 24 2025 – The world is losing interest in investing in others, especially when it comes to humanitarian aid. Foreign Direct Investment (FDI) has slowed to critical levels, weakening emerging markets and further slowing growth across developing nations.

As of 2025, FDI has dwindled to its lowest levels yet, largely due to heightened trade tensions among barriers for international investment. Lowered levels of FDI indicate a move to domestic and isolationist efforts, increasing the likelihood of failed budgetary cooperation to international intergovernmental bodies such as the United Nations.

This is already evident in the UN’s budgets for the Secretariat and for humanitarian aid operations. With many of the UN’s largest donors deciding to cut back on their contributions, the organization will now see a 20 percent reduction in its workforce (6,900 jobs), in addition to sizing down humanitarian aid operations globally. On June 20th, Spokesperson for the Secretary General Stéphane Dujarric remarked, “no office in the UN will be exempt from the 20 percent reduction, and that includes the Secretary General’s office.” This would suggest that the cuts have been brought on due to the reduced budget, and not a want for managerial optimization of the UN’s staff. Under U.S. President Donald Trump, nearly USD 1.5 billion in missed payments have contributed to a USD 3.7 billion budget cut to the UN. This financial strain has been further exacerbated by multiple overdue payments from China. Together, China and the U.S. make up a little over 40 percent of the UN’s total budget.

These cuts have also been seen across the UN Office for the Coordination of Humanitarian Affairs (OCHA), where “the deepest funding cuts ever to hit the international humanitarian sector” have occurred. This has resulted in resulting in OCHA to presenting their new global “hyper-prioritized” appeal, aimed at supporting 114 million people facing life threatening necessities worldwide. The new plan asks for USD 29 billion in funding, a decrease of USD 15 billion called for in the previous plan.

“We have been forced into a triage of human survival,” said Tom Fletcher, Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator .“The math is cruel, and the consequences are heartbreaking. Too many people will not get the support they need, but we will save as many lives as we can with the resources we are given.”

The Global Humanitarian Overview for 2025 originally called for USD 44 billion and aimed to reach about 180 million people out of the nearly three hundred million in need. However as of June, only USD 5.6 billion has been received, less than 13 per cent of the appeal. As a result, aid will be disbursed not purely by human necessity, but by cruel and cold calculations.

With the new calculations, the new plan was designed with three goals. Firstly, by reaching the people facing the most urgent conditions, using a scale ranking humanitarian need for aid, prioritizing cases that reached level 4 (Extreme) and level 5 (Catastrophic) as a starting point for disbursement. Second, the prioritization of life-saving support, according to the planning already concluded in the 2025 Humanitarian Response. Third, ensuring that limited resources are directed based on where they can do the best, accounting for speed of disbursement capabilities.

In his statement on the situation, Fletcher concluded by saying: “Brutal funding cuts leave us with brutal choices. All we ask is 1 percent of what you chose to spend last year on war. But this isn’t just an appeal for money – it’s a call for global responsibility, for human solidarity, for a commitment to end the suffering.”

The Investment-Aid Correlation

Credit: Unsplash/Salah Darwish

The shortfall in humanitarian aid funding has directly coincided with global FDI pull backs, reflecting an investor who is less donor-confident, having a decreased interest in bilateral engagement, and overall lack of security about putting money towards fragile states. For the 2023 financial year, developing economies received USD435 billion in FDI (which was USD 867 billion in 2022), the lowest since 2005. A larger slowdown has also been seen for advanced/high-income economies receiving USD 336 billion in 2023, the lowest since 1996. FDI as a portion of gross domestic product (GDP) accounted for 2.3 percent of developing economies in 2023, which is only half of what it was in 2008 at its peak year.

To combat the shortfalls of decreased FDI, The World Bank identified a three-policy priority plan, specifically for developing economies. The first priority would be to “redouble efforts to attract FDI” by easing restrictions and speeding up investment. According to the World Bank, a 1 percent increase in countries’ labor productivity has been associated with a 0.7 percent increase in FDI inflows.

The second priority would be to “amplify the economic benefits of FDI”, which will involve offering a greater quality of development post investment, and uplifting sectors that create opportunities for underrepresented groups. The third priority would be to “advance global cooperation” by creating initiatives to increase multi-sectoral/international flows, offering geopolitical relief, and creating structures to support developing economies.

By boosting FDI, this plan would also encourage UN member states to expand or maintain their current humanitarian contributions. FDI can be seen as a signal for the depth of global connectedness, with stronger investment flows reinforcing a shared commitment to the delivering of aid. To establish the most efficient system, everyone is needed, and that includes the mobilization of capital and communication. An increase in FDI provides a crucial backbone for countries struggling with crises. While the UN can support and implement as many aid plans as possible, true impact depends on the individual state’s willingness to invest in these developing nations. Without this investment, these economies will remain stagnant, unable to recover and grow, falling behind the world stage indefinitely.

At the same time, official development assistance (ODA) globally is also on a downward trend.

IPS UN Bureau

By Nathalie Meynet
GENEVA, Jun 24 2025 – “We are writing to you regarding the cuts being undertaken under the UN80 Initiative and, more broadly, across the UN system. While we are mindful of the current funding challenges, we believe that the rushed and chaotic manner in which these changes are being implemented is causing deeper harm to both the effectiveness and reputation of the United Nations.

The “slash and burn” approach adopted under the UN80 plan, led by Mr. Guy Ryder, adviser to the Secretary-General, risks not only damaging our mission and harming our beneficiaries; it is also proving costly at a time when the Organization can least afford it.

Furthermore, many of the changes are likely to be reversed in the future, as the next Secretary-General works to re-establish coherence and relevance within the system.

In terms of the mission of the United Nations, the consequences of the lack of funding are already stark. An evaluation of the impact suggests that 23 million fewer people affected by humanitarian crises will receive assistance. There could be 4.2 million additional AIDS-related deaths. It means millions of children at risk of being pushed out of school— with an estimated 250,000 in Sudan alone.

It also means that support for the energy transition, development financing, and counterterrorism efforts will be weakened. While developing countries will be the first and hardest hit, many of these impacts will be global. As noted by outgoing UNDP Administrator Achim Steiner in the Financial Times, we are witnessing a “structural destruction of capacity.”

The funding cuts are already causing serious harm, with experienced frontline workers— especially national staff in developing countries—being dismissed with little notice, as well as international colleagues who have served in some of the most complex and high-risk environments.

The management of the UN80 process under Mr. Ryder, risks deepening the crisis and raises serious issues about coherence and vision. It begins with a poor understanding of mandates. For example, leaked proposals have suggested merging the United Nations with the World Bank and International Monetary Fund, an idea that is not only unfeasible but fundamentally misunderstands the roles of these institutions.

Even for those organizations more integrated within the UN system, no thought has been given to how these ideas could realistically be implemented, or of the appropriate role of Member States. For instance, the suggestion to merge the United Nations High Commissioner for Refugees and the International Organization for Migration would weaken rights protections under the 1951 Refugee Convention.

These proposals also reflect the arbitrary way task force members were appointed, meaning that some entities and development mandates are voiceless in the process. We see a risk that some senior managers will seize the opportunity to expand their own entities at the expense of others.

In a recent staff townhall, Mr. Ryder admitted that the reform process is being conducted “back to front”, as strategic decisions will only be made after there had been a 20% ‘across the board cut’ of Secretariat posts within the United Nations, adding to the thousands of positions across the wider UN system.

This means that while discussions under UN80 are ongoing, managers are being forced to make difficult and unnecessary choices without a clear rationale. This rushed approach also carries significant financial costs.

We estimate that each staff termination or relocation costs $100,000 once indemnities, relocation, and training are factored in. Across the system, this will amount to a minimum of $930 million in costs to Member States, with no suggestion of how this will be paid for. As seen in previous rushed downsizing efforts, new staff will quickly have to be (re)hired, incurring further expenses.

We have urged Mr. Ryder, once a respected champion of social dialogue, to begin by identifying how the strengths of the UN system can be aligned with the needs of our beneficiaries to maximize impact at both the global and country levels, and make the UN fit for the future.

Reform should be guided by these principles and informed by inclusive consultation, recognizing that colleagues on the ground often have a more accurate understanding of how the UN operates, rather than senior management in New York.

Unfortunately, our appeals have gone unacknowledged. We therefore hope that you, the Member States, will scrutinize the UN80 process thoroughly; to consider the damage it may inflict on the effectiveness of the United Nations, and to support a more strategic and sustainable approach to restructuring and financing the UN system.”

IPS UN Bureau

Excerpt:

Nathalie Meynet, President of the 60,000-strong Coordinating Committee for International Staff Unions and Associations (CCISUA), in a letter to Philémon Yunji Yang, President of the General Assembly and to Ambassadors and Permanent Representatives accredited to the United Nations in New York.